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Commercial Paper
In June 2010, the Authority closed on its $225 million Commercial Paper (CP) Program. The program consists of three series - Series A $100 million tax-exempt, Series B $50 million tax-exempt and Series C $75 million taxable. This program will provide interim financing for a portion of the Authority's $3.8 billion Capital Improvement Program (PDF 31.6 mb) (other financing sources include EPA grants, wholesale customer contributions, and pay-as-you-go financing). Under this program, the Authority issues fixed rate, short-term (no greater than 270 days) notes. To provide liquidity and credit support for the notes, the Authority has entered into an irrevocable letter of credit (LOC) with J. P. Morgan Chase Bank for Series A and B, and with U.S. Bank for the Series C. The notes are rated based on J. P. Morgan Chase and U.S. Bank�s rating; in effect the LOC of the bank substitutes the Authority's security with the paying ability of the bank, enhancing the appeal and marketability of the notes. The notes are payable from and secured by a subordinate lien on the Authority's net revenues, as further described in the Authority's master trust indenture, as supplemented.